Verizon says new US tax law to increase fourth-quarter earnings
This will not have any impact on the 2017 statement of cash flows, Verizon said in a filing
The Verizon logo is seen on the side of a truck in New York City, US, October 13, 2016. PHOTO: REUTERS
Verizon said on Wednesday the tax overhaul bill signed into law by US President Donald Trump late last year will result in a one-time reduction in net deferred income tax liabilities of about $16.8 billion.
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The reduction will increase earnings for the fourth quarter and year ending December 31, 2017, but will not have any impact on the 2017 statement of cash flows, Verizon said in a filing.
Verizon estimates that the impact of the law to earnings per share for the year ended December 31 is about $4.10.
Analysts and investors had expected that the law, which slashes the corporate tax rate from 35 per cent to 21 per cent, to boost corporate earnings. Telecom companies stand to benefit because they are primarily domestic businesses.
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Verizon also said it expects a separate accounting change implemented on January 1, 2018 to increase pre-tax retained earnings by $4 billion to $4.6 billion.
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The reduction will increase earnings for the fourth quarter and year ending December 31, 2017, but will not have any impact on the 2017 statement of cash flows, Verizon said in a filing.
Verizon estimates that the impact of the law to earnings per share for the year ended December 31 is about $4.10.
Analysts and investors had expected that the law, which slashes the corporate tax rate from 35 per cent to 21 per cent, to boost corporate earnings. Telecom companies stand to benefit because they are primarily domestic businesses.
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Verizon also said it expects a separate accounting change implemented on January 1, 2018 to increase pre-tax retained earnings by $4 billion to $4.6 billion.